SAN FRANCISCO (KCBS RADIO) – California Gov. Gavin Newsom is trying to keep gas prices from spiking again by threatening oil companies with a plan to penalize excessive profits.
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KCBS Radio insider Phil Matier told KCBS Radio news anchors Eric Thomas and Margie Shafer, the fight is already on.
"California's price gouging penalty is simple – either Big Oil reins in the profits and prices, or they'll pay a penalty," Newsom said in a press release. "Big Oil has been lying and gouging Californians to line their own pockets long enough. I look forward to the work ahead with our partners in the Legislature to get this done."
However, it may prove difficult for the governor to stand up against Big Oil, as they have a lingering impact on California representatives.
In the recent legislative races, a coalition of oil companies pumped around eight million dollars into moderate democrat and republican candidates that might be more in their favor. Of the eight, five won. Matier warned, "that doesn't mean that these candidates, these newly sworn in lawmakers, are going to vote their way, but it does mean that an influence is being felt."
Not only do oil and gas companies have their claws in some lawmakers, but they also have powerful unions on their side. "Let's not forget that the oil refinery business in California is unionized and that means a lot of pipefitters, a lot of electricians, a lot of laborers work in the industry and their voice is very strong in the halls of Sacramento," Matier said. "Unions and big business can work together and they can either put the brakes on or change what people are talking about."
Newsom's proposal plans to discourage oil refiners from fleecing Californians by making it unlawful to charge excessive profits for gas. Excessive refiner margins would be punishable by a civil penalty from the California Energy Commission (CEC). Any money collected from Big Oil would be given back to Californians.
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